Walmart co-leads $500M investment in Chinese online grocery service Dada-JD Daojia

Walmart sold its China-based e-commerce business in 2016, but the U.S. retail giant is very much involved in the Chinese internet market through a partnership with e-commerce firm JD.com. Alibaba’s most serious rival, JD scooped up Walmart’s Yihaodian business and offered its own online retail platform to help enable Walmart to products in China, both on and offline.

Now that relationship is developing further after Walmart and JD jointly invested $500 million into Dada-JD Daojia, an online-to-offline grocery business which is part owned by JD, according to a CNBC report.

Unlike most grocery delivery services, though, Dada-JD Daojia stands apart because it includes a crowdsourced element.

The business was formed following a merger between JD Daojia, JD’s platform for order from supermarkets online which has 20 million monthly users, and Daojia, which uses crowdsourcing to fulfill deliveries and counts 10 million daily deliveries. JD Daojia claims over 100,000 retail stores and its signature is one-hour deliveries for a range of products, which include fruit, vegetables and groceries.

Walmart is already part of the service — it has 200 stores across 30 Chinese cities on the Dada-JD Daojia service; as well as five online stores on the core JD.com platform — and now it is getting into the business itself via this investment.

JD.com said the deal is part of its ‘Borderless Retail’ strategy, which includes staff-less stores and retail outlets that mix e-commerce with physical sales.

“The future of global retail is boundaryless. There will be no separation between online and offline shopping, only greater convenience, quality and selection to consumers. JD was an early investor in Dada-JD Daojia, and continues its support, because we believe that its innovations will be an important part of realizing that vision,” said Jianwen Liao, Chief Strategy Officer of JD.com, in a statement.

Alibaba, of course, has a similar hybrid strategy with its Hema stores and food delivery service Ele.me, all of which links up with its Taobao and T-Mall online shopping platforms. The company recently scored a major coup when it landed a tie-in with Starbucks, which is looking to rediscover growth in China through an alliance that will see Ele.me deliver coffee to customers and make use of Hema stores.

Away from the new retail experience, JD.com has been doing more to expand its overseas presence lately.

The company landed a $550 million investment from Google this summer which will see the duo team up to offer JD.com products for sale on the Google Shopping platform across the world. Separately, JD.com has voiced intention to expand into Europe, starting in Germany, and that’s where the Google deal and a relationship with Walmart could be hugely helpful.

Another strategic JD investor is Tencent, and that relationship has helped the e-commerce firm sell direct to customers through Tencent’s WeChat app, which is China’s most popular messaging service. Tencent and JD have co-invested in a range of companies in China, such as discount marketplace Vipshop and retail group Better Life. Their collaboration has also extended to Southeast Asia, where they are both investors in ride-hailing unicorn Go-Jek, which is aiming to rival Grab, the startup that bought out Uber’s local business.

Fast-growing Chinese media startup ByteDance is raising $2.5B-$3B more

Fast-growing Chinese media startup ByteDance is looking to raise as much as $3 billion to continue growth for its empire of mobile-based entertainment apps, which include news aggregator Toutiao and video platform Tiktok.

The Beijing-based startup is in early-stage talks with investors to raise $2.5 billion to $3 billion, according to a source with knowledge of the plans. That investment round could value ByteDance as high as $75 billion, although the source stressed that the valuation is a target and it might not be reached.

It’s audacious, but if that lofty goal is reached then ByteDance would become the world’s highest-valued startup ahead of the likes of Didi Chuxing ($56 billion) and Uber ($62 billion). Only Ant Financial has raised at a higher valuation, but the company is an affiliate of Alibaba and therefore not your average ‘startup.’

The Wall Street Journal first broke news of the ByteDance investment plan.

But there’s more: Earlier this week, the Financial Times cited sources who indicate that ByteDance is keen to go public in Hong Kong with an IPO slated to happen next year.

ByteDance is best-known for Toutiao, its news aggregator app that claims 120 million daily users, while it also operates a short-video platform called Douyin. The latter is known as TikTok overseas and it counts 500 million active users. TikTok recently merged with Musical.ly, the app that’s popular in the U.S. and was acquired by ByteDance for $1 billion, in an effort aimed at combining both userbases to create an app with global popularity.

The firm also operates international versions of Toutiao, including TopBuzz and NewsRepublic while it is an investor in streaming app Live.me.

The company’s growth has been mercurial but it has also come with problems as the company entered China’s tech spotlight and became a truly mainstream service in China.

ByteDance had its knuckles wrapped by authorities at the beginning of the year after it was deemed to have inadequately policed content on its platform. Then in April, its ‘Neihan Duanzi’ joke app was shuttered following a government order while Toutiao was temporarily removed from app stores. It returns days later after the company had grown its content team to 10,000 staff and admitted that some content it had hosted “did not accord with core socialist values and was not a good guide for public opinion.”

Gmail for iOS and Android now lets you turn off conversation view

When Gmail launched with its threaded conversation view feature as the default and only option, some people sure didn’t like it and Google quickly allowed users to turn it off. On mobile, though, you were stuck with it. But here’s some good news for you conversation view haters: you can now turn it off on mobile, too.

The ability to turn off conversation view is now rolling out to all Gmail app users on iOS and Android . So if you want Gmail to simply show you all emails as they arrive, without grouping them to”make them easier to digest and follow,” you’re now free to do so.

If you’ve always just left conversation view on by default, maybe now is a good time to see if you like the old-school way of looking at your email better. I personally prefer conversation view since it helps me keep track of conversations (and I get too many emails already), but it’s pretty much a personal preference.

To make the change, simply tap on your account name in the Settings menu and look for the “conversation view” check box. That’s it. Peace restored.

Japan’s Freee raises $60M to grow its cloud accounting business

Japan-based accounting software company Freee, one of the country’s most-prominent startups, has raised a $60 million Series E funding round as it bids to expand its services into other areas of management for its customers.

Freee was founded six years ago — we wrote about the startup when it raised a Series A in 2013 — which makes it one of the ‘oldest’ startups in Japan, while this round is also a large one for the country, too. Japan’s startup ecosystem has a culture that encourages founders to take their companies’ public earlier than in most parts of the world, to mitigate some risk, but there are signs of alternative approaches that include this round and of course the recent IPO of Mercari, which went public this summer and raised over $1 billion.

“Japan is a country that respects precedent a lot,” Freee founder and CEO Daisuke Sasaki told TechCrunch in an interview. “Having present cases will change [the culture] a lot, we are staying private and investing in growth. The ecosystem isn’t changing [yet] but [startups, founders and VCs] now have more options.”

Free was one of the first Japanese startups to raise from overseas investors, a move that helped get Japanese VCs interested in enterprise and Saas, and this time around it has pulled in capital from a bunch of big names: Chat app company Line, Mitsubishi UFJ Financial Group (MUFG) — Japan’s largest bank — consumer credit firm Life Card and “several [unnamed] international institutional investors.”

DCM and Infinity Investments are among the startup’s earliest backers.

Today, Freee offers cloud-based accounting and HR software and it claims to have over one million business accounts. It has over 5,000 certified accountant advisors — who help it reach new customers and also use it for their own work — and the company said that over 3,500 apps and services, including mainly financial products, are integration with its software.

Going forward, Sasaki — who is a former Googler — said Freee will use this new capital to build out an API ecosystem to enable more integrations — some of its practical ones right now include Slack and Salesforce — while it is planning a major collaboration with Line to allow Line business customers to integrate their use of the app with Free, while it is exploring how it can collaborate around Line Pay.

Freee founder and CEO Daisuke Sasaki

Freee is also focused on expanding the scope of its services to branch out into products that help with more general management and operational tasks.

“We want to focus not only on back office but also to add value to customers to make their businesses better through dashboards, reporting and insight. Customers who use the [existing business] reports grow faster. Our vision is to give much better insight and business advice through AI [and] to do that we need more data, not just back office but front line too,” Sasaki said.

Finally, the startup is exploring ways it can enable banks and financial organizations to work more closely with its customer base. Already customers can share data within Freee to banks for assessment for loans and other credit products, and the company is exploring the potential to introduce a marketplace that would give its customers a place to scout out financial products at more preferential rates.

“Initially we focused on small business but now our biggest customers have a couple of hundred employees so we are going upmarket,” Sasaki told TechCrunch.

One area Freee won’t be moving into is overseas markets. Yet at least. Sasaki explained that the company wants to build out that vision of an expanded ecosystem of connected services and more in-depth business tools before branching out into new countries.

SmartHR, a younger rival to free which specializes in HR as the name suggests, raised $13.3 million earlier this year to push on into areas such as payroll and more. That could begin to pose a threat to Freee, particularly since SmartHR a developer platform to hose third-party applications and services.

LemonBox brings US vitamins and health products to consumers in China

China is rising in many ways — the economy, consumer spending and technology — but still many of its population looks overseas, and particularly to the West, for cues on lifestyle and health. That’s a theme that’s being seized by LemonBox, a China-U.S. startup that lets Chinese consumers buy U.S. health products at affordable prices.

Indeed, the recent scare around Chinese vaccinations, which saw faulty inoculations given to babies and toddlers in a number of provinces, has only fueled demand for overseas health products which LemonBox founder Derek Weng discovered himself when his father was diagnosed as having high blood sugar levels. Weng, then working in the U.S. for Walmart, was able to look up and buy the right medicine pills for his father and bring them back to China himself. He realized, however, that others are not so fortunate.

After polling friends and family, he set up an experimental WeChat app in 2016 that dispensed health information such as articles and information. Within a year, it had racked up 30,000 subscribers and given him the confidence to jump into the business fully.

Today, LemonBox allows Chinese consumers to buy its own-branded daily vitamin packs from the U.S.. Further down the line, the goal is to expand into more specific verticals, including mother and baby, beauty and daily supplements, according to Weng, who believes that the timing is good.

“For the first time in China, people are taking a major interest in health and are working out, while society is becoming more developed,” he told TechCrunch in an interview. “We estimate that Chinese consumers are investing 30 percent of their income in health.”

The LemonBox daily pack of vitamins.

Since its full launch three weeks ago, LemonBox has pulled in 700 customers with 40 percent purchasing a three-month bundle package and the remainder a monthly order, Weng said. Typical basket size is around 300 RMB, or nearly $45.

To get the business off the ground, Weng needed expert support and his co-founder Hang Xu — who is also LemonBox’s “Chief Nutrition Scientist” — has spent 10 years in the field of nutrition science. Xu holds a Ph.D. from Texas A&M University, is a U.S.-registered dietitian and has published over 10 research papers. The startup’s third co-founder, Eddy Meng (CMO), is a graduate of Chinese app store startup Wandoujia which sold to Alibaba two years ago.

Right now, LemonBox has offices in the U.S. and China and it is squarely focused on e-commerce but Weng said the company is looking to introduce other kinds of health services. That could include consultations with dietary experts and specific offerings for patients leaving a hospital or in other long-term care situations, as well as potentially own-label products.

“We look at Stitch Fix for inspiration,” Weng said. “Right now, it leverages data to develop its own in-house private label products that improve on margin and the accuracy of recommendations. This kind of data and further services will be the next stage for us.”

LemonBox raised a seed round in March, which included participation from Y Combinator, and as part of Y Combinator’s current program, it’ll present to prospective investors at the program’s demo day. Already, though, Weng said there’s been interest from investors which the company is thinking over.

Interestingly, it was forth time lucky entering YC for Weng, who had before applied with previous startups unsuccessfully. This time it was entirely circumstantial. He applied to be in the audience for Y Combinator’s ‘Startup School’ event that took place in Beijing in May.

Unbeknownst to him, YC picked out a handful of attendees whose companies were of interest, and, after an interview that Weng didn’t realize was an audition, LemonBox was selected and fast-tracked into the organization’s latest program. In addition, YC joined the startup’s seed funding round which had initially closed in March.

That anecdotal evidence says much of YC’s effort to grab a larger slice of China’s startup ecosystem.

The organization has aggressively recruited companies from under-represented regions such as India, Southeast Asia and Africa, but China remains a tough spot. According to YC’s own data, fewer than 10 Chinese companies have passed through its corridors. That’s low considering that the organization counts over 1,400 graduates.

With events like the one in May, which helped snare LemonBox, and a new China-centric role for partner Eric Migicovsky, who founded Pebble, YC is trying harder than ever.

Apple has removed Infowars podcasts from iTunes

Apple has followed the lead of Google and Facebook after it removed Infowars, the conspiracy theorist organization helmed by Alex Jones, from its iTunes and podcasts apps.

Unlike Google and Facebook, which removed four Infowars videos on the basis that the content violated its policies, Apple’s action is wider-reaching. The company has withdrawn all episodes of five of Infowars’ six podcasts from its directory of content, leaving just one left, a show called ‘Real News With David Knight.’

The removals were first spotted on Twitter. Later, Apple confirmed it took action on account of the use of hate speech which violates its content guidelines.

“Apple does not tolerate hate speech, and we have clear guidelines that creators and developers must follow to ensure we provide a safe environment for all of our users. Podcasts that violate these guidelines are removed from our directory making them no longer searchable or available for download or streaming. We believe in representing a wide range of views, so long as people are respectful to those with differing opinions,” a spokesperson told TechCrunch.

Apple’s action comes after fellow streaming services Spotify and Stitcher removed Infowars on account of its use of hate speech.

Jones has used Infowars, and by association the platforms of these media companies, to broadcast a range of conspiracy theories which have included claims 9/11 was an inside job and alternate theories to the San Bernardino shootings. In the case of another U.S. mass shooting, Sandy Hook, Jones and Infowars’ peddling of false information and hoax theories was so severe that some of the families of the deceased, who have been harassed online and faced death threats, have been forced to move multiple times. A group is suing Jones via a defamation suit.

Short video service Musical.ly is merging into sister app TikTok

Musical.ly, the short video app that’s popular among teens and young people, is going away. Kinda.

The app and all user data and accounts is being merged with Toktok, a sister app that’s owned by ByteDance, the Chinese company that acquired Musical.ly for around $1 billion last year.

The switch-over happens today (Thursday) and it should be relatively seamless. Users of Musical.ly will see their app switch to TikTok once they update the app, and they should find their account, videos and personal settings inside the new app as per usual.

One notable new addition is a setting that alerts a user when they have been active in the app for two hours that day. Its addition comes just a day after Facebook added similar ‘well-being’ features to its core social network and Instagram.

ByteDance is making the move to consolidate its audiences on both apps. Four-year-old Musical.ly, which is particularly popular in the U.S., has around 100 million users while TikTok, which was created in 2016 and operates worldwide minus China, claims 500 million monthly active users. In China, the sister product is Douyin, while the company also offers news apps Toutiao in China and TopBuzz across the rest of the world.

“TikTok, the sound of a ticking clock, represents the short nature of the video platform. We want to capture the world’s creativity and knowledge under this new name and remind everyone to treasure every precious life moment. Combining musical.ly and TikTok is a natural fit given the shared mission of both experiences,” said Alex Zhu, co-founder of Musical.ly and Senior Vice President of TikTok, in a statement.

The app merger follows the closure of Musical.ly’s standalone live-streaming app Live.ly in June. That was part of the deal agreed to for the Musical.ly acquisition, and the company directed its users to Live.me, an app that counts ByteDance among its investors.

It makes sense that ByteDance is consolidating its sibling apps since Facebook is stalking out the short video space. The social network giant has tested a Musical.ly style app and just this week we found hints that it is planning to launch “Talent Show,” which would allow users to compete by singing popular songs then submitting their audition for review.

There’s also the revenue side. A global platform plays better for advertisers rather than forcing them to pick either Musical.ly or TikTok, or going through the added rigmarole of working on both.

There’s more: Google is also said to be developing a censored news app for China

Can Google’s week get any worse? Less than a day after the revelation that it is planning a censored search engine for China, so comes another: the U.S. firm is said to be developing a government-friendly news app for the country, where its search engine and other services remain blocked.

That’s according to The Information which reports that Google is essentially cloning Toutiao, the hugely popular app from new media startup ByteDance, in a bid to get back into the country and the minds of its 700 million mobile internet users. Like Toutiao, the app would apparently use AI and algorithms to serve stories to readers — as opposed to real-life human editors — while it too would be designed to work within the bounds of Chinese internet censorship.

That last part is interesting because ByteDance and other news apps have gotten into trouble from the government for failing to adequately police the content shared on their platforms. That’s resulted in some app store suspensions, but the saga itself is a rite of passage for any internet service that has gained mainstream option, so there’s a silver lining in there. But the point for Google is that policing this content is not as easy as it may seem.

The Information said the news app is slated for release before the search app, the existence of which was revealed yesterday, but sources told the publication that the ongoing U.S.-China trade war has made things complicated. Specifically, Google executives have “struggled to further engage” China’s internet censor, a key component for the release of an app in China from an overseas company.

There’s plenty of context to this, as I wrote yesterday:

The Intercept’s report comes less than a week after Facebook briefly received approval to operate a subsidiary on Chinese soil. Its license was, however, revoked as news of the approval broke. The company said it had planned to open an innovation center, but it isn’t clear whether that will be possible now.

Facebook previously built a censorship-friendly tool that could be deployed in China.

While its U.S. peer has struggled to get a read on China, Google has been noticeably increasing its presence in the country over the past year or so.

The company has opened an AI lab in Beijing, been part of investment rounds for Chinese companies, including a $550 million deal with JD.com, and inked a partnership with Tencent. It has also launched products, with a file management service for Android distributed via third-party app stores and, most recently, its first mini program for Tencent’s popular WeChat messaging app.

As for Google, the company pointed us to the same statement it issued yesterday:

We provide a number of mobile apps in China, such as Google Translate and Files Go, help Chinese developers, and have made significant investments in Chinese companies like JD.com. But we don’t comment on speculation about future plans.

Despite two-for-one value on that PR message, this is a disaster. Plotting to collude with governments to censor the internet never goes down well, especially in double helpings.

Twitter posts record $100M profit but loses 1M users

The social media apocalypse is on us this week. Days after Facebook’s stock took a record $123 billion plunge on a poor earnings report, Twitter’s shares are down nearly 20 percent after the company announced falling users numbers.

The microblogging service recorded a drop of one million monthly users in Q2, with 335 million overall and 68 million in the U.S.. International users stayed consistent, with U.S. numbers down from 69 million in the previous quarter.

Bloomberg reported that Twitter’s share price sunk by 17 percent in early trading following the earnings announcement.

The market seems spooked that Twitter has failed to grow in the U.S.. Indeed, one year ago it recorded 68 million users on home turf, and while it has grown its international presence by a fairly modest 3.5 percent over that period, there are doubts as to whether Twitter can increase its audience. The company itself said it expects to see its monthly active user count drop by “mid-single-digit millions.”

Twitter has increased its efforts finding and suspending fake accounts, which is said to have doubled over the past year, but it also said that it didn’t expect that to impact users numbers this quarter.

“When we suspend accounts, many of the removed accounts have already been excluded from MAU or DAU, either because the accounts were already inactive for more than one month at the time of suspension, or because they were caught at signup and were never included in MAU or DAU,” Twitter further explained in its release.

The company did say, though, that its work with SMS carriers and reallocation of resources, are the reasons why it is forecasting more user number declines.

While Twitter can (just about argue) that its daily user number grew by 11 percent in the quarter — a little higher than 10 percent in Q1 — the company doesn’t actually disclose this number.

The stock drop will be frustrating for executives because, in its favor, Twitter had a record quarter of profit. GAAP net income came in at $100 million with revenue climbing 24 percent year-on-year to reach $711 million. Adjusted EBITDA came in at $265 million — Twitter is predicting it will decline to $215-$235 million in the next quarter.

That profit was above analyst forecasts of $70 million but, following Facebook’s epic crash this week, investors want to see growth potential… and that means more users. Unfortunately, that’s Twitter’s Achilles heel.

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Facebook also removes 4 Infowars videos, including one it previously cleared

Days after defending its decision to give a voice to conspiracy theory peddler Alex Jones and his Infowars site, Facebook has removed four of his videos for violating its community standards.

But one of the four had already been allowed to slip through the firm’s review system. A source within Facebook told TechCrunch that one of the videos had previously been flagged for review in June but, after being looked over by a checker, it was allowed remain on the social network. That decision was described as “erroneous” and it has now been removed.

Facebook’s removal of the videos comes days after YouTube scrubbed four videos from Jones from its site for violating its policies on content. The Facebook source confirmed that three of the videos it has removed were flagged for the first time on Wednesday — presumably after, or in conjunction with, them being highlighted to YouTube — but the fact that one had gotten the all-clear one again raises question marks about the consistency of Facebook’s review process.

Contrary to some media reports, Jones has not received a 30-day ban from Facebook following these removals. TechCrunch understands that such a ban will be issued if Jones violates the company’s policies in the future, but, for now, he has been given a warning.

“Our Community Standards make it clear that we prohibit content that encourages physical harm [bullying], or attacks someone based on their religious affiliation or gender identity [hate speech]. We remove content that violates our standards as soon as we’re aware of it. In this case, we received reports related to four different videos on the Pages that Infowars and Alex Jones maintain on Facebook. We reviewed the content against our Community Standards and determined that it violates. All four videos have been removed from Facebook,” a spokesperson said in a statement.

Earlier this month, the company’s head of News Feed John Hegeman said of Infowars content — which includes claims 9/11 was an inside job and alternate theories to the San Bernardino shootings — that “just for being false, doesn’t violate the community standards.” He added: “We created Facebook to be a place where different people can have a voice.”

Facebook seemed to double down on that stance on Monday when, at another event, VP of product Fidji Simo called Infowars “absolutely atrocious” but then said that “if you are saying something untrue on Facebook, you’re allowed to say it as long as you’re an authentic person and you are meeting the community standards.”

It’s not been a good week for Facebook. A poor earnings report spooked investors and caused its valuation drop by $123 billion in what is the largest-single market cap wipeout in U.S. trading history. That’s not the kind of record Facebook will want to own.